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Extract of COS debate on MEWR – Hawker Centres

Mr Yee Jenn Jong (Non-Constituency Member): Thank you, Mr Chairman, for allowing me to join in the debate. I have a question on the operating model of the hawker centres. Earlier, the Minister said that he intends to accept all of the Panel’s proposals, so I would like to ask regarding the model of letting the social enterprises run the operations. Will the Ministry be keeping a very close watch on the rents and the way the operations will be run? I consider the provision of hawker centres to be essential social goods, to make food prices affordable to everybody. I am concerned that sometimes when we let market forces take over the provision of social goods, we can end up with rising cost, just like we saw industrial spaces going to REITS and then prices have been creeping up. So, is there some assurance that there will be very close monitoring on the way this is run, especially when more and more hawker centres are being run by social enterprises?

Dr Vivian Balakrishnan: First, I better clarify that I did not say that I would accept all the recommendations of the Panel. I was referring to the Drainage Panel. The Hawker Centre Panel has not submitted their final recommendations yet, so I do not want to jump the gun. But let me tell you basically how I see this.

First, I have to persuade all of you to accept that hawker centres are social infrastructures. Therefore, as the ultimate landlord, we are not trying to maximise rentals from it.

I am keen to accept the recommendation for social enterprise because, if you remember, when I first announced that we would reverse this policy, I said that I wanted the manager to be a not-for-profit model. Basically, you still need to be viable and to make ends meet. But you are not out there as a real estate player and you are not engaging in arbitrage. And what starts off as a hawking business becomes a real estate business. All this is very easy to express but I am not going to underestimate the difficulty of making it work in practice.

In the context of Singapore, the most successful co-operative is FairPrice. I give all due respect to Mr Seah Kian Peng. It is a social enterprise, it has fulfilled a social mission of ensuring commodities and essential food are priced reasonably and provides competition. What I am hoping to do by changing this hawker centre policy is, number one, increase the supply of places. That should have some effect on prices, both in terms of rental as well as the prices charged by hawkers. But having said that, I do not believe that simply lowering rentals by itself will necessarily lead to lower prices charged by hawkers. At the end of the day, they are people making a living. They will also try to charge what the market will bear.

So I just want the Member to understand – let us not be overly simplistic in the way we implement this, and also to be very careful that we do not get unintended consequences. For now, if we can get a cooperative to run it, and the cooperative knows that what we are after is cheap, good and clean food, and that the people who are working there are Singaporeans, locals – better still if they are people within the community, they are there to make a living for themselves and they are preparing cooked fresh food, good enough for their own families and friends to eat – I think that will be an achievement. That already makes us unique, because when we first created hawker centres, it was just a hygiene measure – clear mobile hawkers on the streets. But this has taken on a life of its own, it has become a unique icon of Singapore life. So I give the Member the assurance that we will certainly be watching it very, very closely, and to watch the evolution of these new generation hawker centres, that it does not deviate from the original objective. Does the Member have a specific suggestion in mind?

Mr Yee Jenn Jong: No, I do not have a specific suggestion. I thank the Minister for the answers. It is easier to control when we have one or two hawker centres being run by a particular social enterprise. But I imagine a day when maybe we have half or even more of our hawker centres being run by social enterprises, and then they become a very sizeable market force. So, would we want to start thinking right now how do we set the KPIs to ensure that the outcomes will always be affordable food, whether it is done through fixing the rent that they can charge to the hawkers or through other means? I think we should think seriously about this rather than leave it to market forces.

One comment on “Extract of COS debate on MEWR – Hawker Centres”

Agree that leaving hawker centres to social enterprises without careful watch might produce unwanted results that can be difficult to manage after. NTUC is seen by many as “Government”, hardly a social social enterprise.